Hey guys first time poster. I decided to post here because I was experiencing similar troubles as the ones you guys were and when searching about it came across this post. I can attest that this was mainly due to the presence of Exchange account but that isn't the whole of it. In the Mail, Contacts, Calendar settings at the bottom of each group you can set your default account. Basically you can have separate default accounts for your e-mail, contacts and calendar. In my case my default contacts account was set to my exchange account thus causing the issue of not only having weird labels but also not being able to set custom labels. Anyways hope this helps anyone else that is having the same issue and is looking for a solution.